Crude Oil Jumps on Inventories

Crude Oil has had a volatile last seven days as a range of fundamental factors continues to push it around.

Late Tuesday, we saw the latest API inventory data released, which showed a larger than expected draw in oil inventories. We ended up with a 3.16M barrell draw versus 2.331M expected.

That comes in contrast to last weeks data which showed a large build. However, it was the subsequent rally in price that was the interesting one in oil.

Price has drifted marginally higher in early Asian trade, since the report. All eyes now turn to the official figure from the EIA to be released in Wednesday’s US session. The API has been a relatively accurate measure of what we can expect from the EIA in recent weeks.

The Technical Picture

In the  medium term (daily chart) we are still bearish in. Long-term (monthly.weekly) it is clear that oil is in an uptrend.

Price jumped on the inventory data and is pushing higher in the Asian session. I’m watching $69.35 as the key upside level.

That’s an area where I expect a reaction. I wouldn’t be surprised if we push higher into the EIA number and assuming we meet expectation then I feel we could pull back down.

$68 remains the major volume level at the moment. If we get a big draw, then we can start looking at a move to $70.85.